Remittances and Economic Growth: Case for Asian Countries

Abstract

This research aims to analyze the influence of remittance of migrant on economic frowth of the origin country. We also scrunitize the affect of capital, population ratio, the ratio of school participation, and the ratio of exports on economic growth in eight largest receiving countries of remittance in Asia which are India, China, Bangladesh, Philippines, Indonesia, South Korea, Pakistan and Sri Lanka using generalized method of momments (GMM). The results show that remittance have a positive and significant influence on economic growth. The increasing number of remittance shipments will have an effect on the country’s economic growth.


 


 


Keywords: economic growth, remittance, generalized method of momments

References
[1] . 2015. Financial development and economic growth: Evidence from North African countries. Economic Alternatives, 7(2), 17-33.


[2] Abbas, Q., & Nasir, Z. M. 2001. Endogenous Growth and Human Capital: A Comparative Study of Pakistan and Sri Lanka [with Comments]. The Pakistan Development Review, 987-1007.


[3] Adams, R. H., & Cuecuecha, A. 2010. Remittances, household expenditure and investment in Guatemala. World Development, 38(11), 1626-1641.


[4] Åhlberg, M. 1998. Education for sustainability, good environment and good life. Åhlberg, M. & Leal Filho, W.(Eds.), 25-43.


[5] Ahlburg, D. A., & Lutz, W. 1998. Introduction: The need to rethink approaches to population forecasts. Population and Development Review, 24, 1-14.


[6] . 2014. Remittances and well-being among rural-to-urban migrants in China. Review of Economics of the Household, 12(3), 517-546.


[7] . 2016. Effects of remittance inflows on economic growth of Nigeria. Developing Country Studies, 3(3).


[8] Anderson, T. W., & Hsiao, C. 1982. Formulation and estimation of dynamic models using panel data. Journal of econometrics, 18(1), 47-82.


[9] Arellano, M., & Bover, O. 1995. Another look at the instrumental variable estimation of error-components models. Journal of econometrics, 68(1), 29-51.


[10] Arellano, M., & Bond, S. 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.


[11] . 2007. Financial and monetary integration in East Asia: opportunities and challenges for Indonesia. Elex Media Komputindo.


[12] Asian Development Bank. Economics, Re, & Asian Development Bank. Development Indicator 2011. Key Indicators for Asia and the Pacific 2011. Asian Development Bank.


[13] Awan, A. G. & Tahir, M. T. 2015. Impact of working environment on employee’s productivity: A case study of Banks and Insurance Companies in Pakistan. European Journal of Business and Management, 7(1), 329-345.


[14] . 2013. A generalized spatial panel data model with random effects. Econometric Reviews, 32(5-6), 650-685.


[15] . 2010. Workers’ Remittances and the Equilibrium Real Exchange Rate: Theory and Evidence. IMF Working Paper No. 10/287


[16] Barro, R. J. 1998. Human Capital and Growth in Cross-Country Emperical Study. In Economic Growth-Literature Surveys. Cambridge MA. Harvard University.


[17] Barro, R. J. & Sala-i Martin X (2004) Economic Growth. Aufl. Massachusetts Institute of Technology (MIT) ISBN: 0-262-02553-1


[18] . 2014. The Impact of Migrant Remittances on Economic Growth Emperical Study:


[19] Case of Algeria (1970-2010). European Scientific Journal, ESJ, 10(13).


[20] . 2003. The demographic dividend: A new perspective on the economic consequences of population change. Rand Corporation.


[21] Blundell, R., & Bond, S. 1998. Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.


[22] Blundell, R., & Bond, S. 2000. GMM estimation with persistent panel data: an application to production functions. Econometric reviews, 19(3), 321-340.


[23] Borjas, G. J. 2013. The analytics of the wage effect of immigration. IZA Journal of Migration, 2(1), 22.


[24] . 2006. Beware of emigrants bearing gifts: optimal fiscal and monetary policy in the presence of remittances.


[25] . 2008. Macroeconomic consequences of remittances. Washington, DC: International Monetary Fund.


[26] . 2012. Internal migration and socio-economic status of migrants: a study in Sylhet City, Bangladesh. American Journal of Human Ecology, 1(4), 123-133.


[27] Connell, J. 1981. Migration remittances and rural development in the South Pacific. Development Studies Centre Monograph No. 27. 229-54 Australian National University


[28] Dominick, Salvatore. 2007. Microeconomics. Fourth Edition. Jakarta: Erlangga


[29] . 2001. Macroeconomics. Translation. Jakarta: Global Media Education


[30] Gemmell, N. 1996. Evaluating the impacts of human capital stocks and accumulation on economic growth: some new evidence. Oxford bulletin of economics and statistics, 58(1), 9-28.


[31] . 2007. Impact of remittances on poverty and financial development in SubSaharan Africa (No. 7-38). International Monetary Fund.


[32] Hanif, N., & Arshed, N. 2016. Relationship between School Education and Economic Growth: SAARC Countries. International Journal of Economics and Financial Issues, 6(1).


[33] . 1988. Estimating vector autoregressions with panel data. Econometrica: Journal of the Econometric Society, 1371-1395.


[34] International Labour Organization. 2015. Labour Market, 2015. Switzerland. ILO


[35] . 2014. Remittances, growth and poverty: New evidence from Asian countries. Journal of Policy Modeling, 36(3), 524-538.


[36] Karagöz, K. 2009. Worker Remittances And Economic Growth: Evidance From Turkey. Journal of Yasar University, 4(13), 1891-1908.


[37] Keeley, B. 2015. Income inequality: The gap between rich and poor. OECD.


[38] King, R. & Vullnetari, J. 2003. Migration and development in Albania. Sussex Centre for Migration Research. Development Migration, Globalisation and Poverty


[39] Kuznets, S. 1955. Economic growth and income inequality. The American economic review, 45(1), 1-28.


[40] Hagen-Zanker, J. & Siegel, M. 2007. The determinants of remittances: A review of the literature. MGSoG Working Paper No. 003


[41] . 2015. Remittances in the face of disasters: A case study of rural Samoa. Environment, Development and Sustainability, 17(3), 653-672.


[42] Lucas, R. E. & Stark, O. 1985. Motivations to remit: Evidence from Botswana. Journal of political Economy, 93(5), 901-918.


[43] . 2000. Macroeconomic Theory. Erlangga Publisher. Jakarta


[44] Marquette, C. 1997. Population and environment relationships in developing countries: a select review of approaches and methods. CMI Working paper WP 1997: 15. Chr. Michelsen Institute


[45] Nizar, M. A. 2014. The Effect of Workers’ Remittances on Exchange Rates of Rupiah (No. 65728). University Library of Munich, Germany.


[46] Obstfeld, M. & Rogoff, K. S. 1996. Foundations of international Macroeconomics (Vol. 30). Cambridge, MA: MIT press


[47] Oiconita, N. 2006. Analysis of national exports and output in Indonesia: the period 1980-2004 studies on causality and cointegration. Doctoral dissertation, FE-UI.


[48] . 2012. Demographic patterns and trends in Central Ghana: baseline indicators from the Kintampo Health and Demographic Surveillance System. Global health action, 5(1), 19033.


[49] Philip, K. & Amstrong, G. 2001.. Marketing principles. Erlangga Publisher, Jakarta.


[50] Rahardja, P. & Manurung, M. 2001. Macroeconomic Theory. Faculty of Economics, University of Indonesia. Jakarta


[51] Ratha, D. 2003. Workers’ remittances: An important and stable source of external development finance, in Global Development Finance 2003: Striving for Stability in Development Finance. Washington DC: The World Bank,157-175


[52] Ratha, D. & Mohapatra, S. 2007. Increasing the macroeconomic impact of remittances on development. World Bank.


[53] . 2011. Impact of migration on economic and social development: A review of evidence and emerging issues.


[54] Rao, B. B. & Hassan, G. M. 2011. A panel data analysis of the growth effects of remittances. Economic modelling, 28(1), 701-709.


[55] Roodman, D. 2009. How to do xtabond2: An introduction to difference and system gmm in stata. Stata Journal, 9 (1), 86-136.


[56] Rosyidi, Suherman. 2003. Introduction to Economic Theory; Approach to Micro and Macroeconomic Theories. PT raja grafido persada. Jakarta.


[57] . 2004. Macroeconomic Sciences. Seventeenth Edition. Jakarta: PT. Global Media Education


[58] . 2011. Long run and short run effects on education levels: Case in Malaysia. International Journal of Economic Research, 2(6), 77-87.


[59] Shera, A., & Meyer, D. 2013. Remittances and their impact on Economic Growth. Periodica Polytechnica. Social and Management Sciences, 21(1), 3.


[60] . 2010. Remittances and Economic Growth: Empirical Evidence from Bangladesh, India and Sri Lanka (discussion paper). The University of Western Australia.


[61] Stark, O. 1999. Altruism and beyond: An economic analysis of transfers and exchanges within families and groups. Cambridge University Press.


[62] Suseno & Iskandar Simorangkir. 2004.. Exchange Rate Policy System. Bank Indonesia. Jakarta


[63] Tambunan, T. 2003. Development of the agricultural sector in Indonesia. Ghalia Indonesia


[64] . 2015. Foreign remittances, foreign direct investment, foreign imports and. economic growth in Pakistan: a time series analysis. Arab Economic and Business Journal, 10(2), 82-89.


[65] Rosdiana, H. & Tarigan, R. 2005. Taxation Theory and Application. Jakarta: RajaGrafindo Persada.


[66] . 2006. Economic Development. Erlangga. Jakarta.


[67] . 2012. A novel technique to measure the total evaporation and its components during sprinkler irrigation. In Proceedings of the ICID and Irrigation Australia 2012 Conference and Trade Show. Irrigation Australia Ltd..


[68] . 2003. Low back pain in schoolchildren: the role of mechanical and psychosocial factors. Archives of disease in childhood, 88(1), 12-17.


[69] Widodo, S. T. 1990. Economic indicators. Yogyakarta: Kanisius Publisher.


[70] Windmeijer, F. 2005. A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of econometrics, 126(1), 25-5